sucks. Whenever I'm downloading something, the download rate is slow, but then it hits the fan because every two seconds (sometimes on even a higher frequency) it snatches down to 0 kb/s and stays there for less than a second.

This TRIPLES the duration of downloads and of course it happens when I'm downloading the last part of an 11-Part archive from rapidshare at an incredible frequency.
I'll call my provider tomorrow but now I'm asking you, WTF? Is there anything you could imagine that causes such crap?

Hmm...

My only suggestion would be to end all internet connecting processes.

Maybe try google'in "Full Speed", a program that tweeks your connection settings to increase performance.